Veteran stockbroker cool on off-floor trading proposal

Veteran stockbroker Irving Ackerman has raised his objection to a proposal to implement off-the-floor trading, saying this could break solidarity and friendship among stockbrokers.

Ackerman, one of the founding members of the old Makati Stock Exchange, argued that the proposal would defeat the whole purpose of having an exchange in the first place.

Off-the-floor trading refers to stock transactions done outside the exchange. It allows brokers to trade in their offices or from any computer with a reliable Internet connection.

"There’s a move by some people to have the exchange removed and am very much against that. If brokers are trading off the floor that would really lose the basic value of being together. We form a lot of friendships in the exchange. We exchange ideas. There’s camaraderie. For me it is not good if brokers are all in different locations," said Ackerman, who heads his own brokerage house I. Ackerman & Co. Inc.

"Investors can come to the exchange and monitor their stocks. If we do away with the exchange there would be nothing for them to watch. If we have visitors from other exchanges, we would have nothing to show them," he added.

Ackerman said that while there are some brokers now trading in their offices there are still a lot of broker-firms that have opted to trade in the exchange.

"These brokers applied for voluntary off-the-floor trading. They set up computers in their offices. I think we should just leave this on a voluntary basis. If anyone wants to do it in the office then they can still do it simply by seeking approval of the exchange," Ackerman said.

The Association of Securities Analysts of the Philippines (ASAP), which broached the idea of off-floor trading to the exchange, is now drafting its position paper on this. It believes that such arrangement would cut costs, improve liquidity and allow better execution of stock trades.

"Saving money should be secondary. What we need to do is get more people to invest in the stockmarket. It is sure nice to save money but we need to have more investors in order for the market to grow further,"said Ackerman, who has withstood more than four decades playing the Philippine market.

"I’m going to fight this out until the bitter end. If it comes to a public battle I will do my best to stop it," Ackerman said.

ASAP is considering adopting the US model where investors will be provided a window to get in and out of the market because of external developments.

The Philippine Stock Exchange said it is still awaiting the position paper to be submitted by ASAP.